The grain growth kinetics of an extruded fine-grained Mg-9Gd-4Y-0.4Zr (wt%) alloy was investigated by static annealing in the temperature range of 673-773 K. In addition to the microstructural evolution, textural evolution of the material was also studied during high temperature exposure. The material revealed an unusual basal texture in the extruded condition which was weakened after annealing. The material behavior can be divided into two temperature regimes, namely from 673 to 723 K and from 723 to 773 K. According to the obtained data, although the material shows superior thermal stability in comparison with the conventional Mg alloys, it loses most of its resistance to grain growth at temperatures higher than 673 K. It was observed that although the Mg-3(Gd,Y) precipitates have sufficient thermal stability to restrict grain growth, significant grain growth occurs at the highest temperatures where increased mobility of the grain boundaries seems to be dominant. However, there is restricted growth at lower temperatures, where the grain growth is controlled by lattice self-diffusion.